Monday markets
Running into Monday’s afternoon, the livestock complex is charged and gunning for more. The live cattle, feeder cattle and lean hog markets are all capitalizing on the lower trend in corn, while also hoping that fundamental support will help propel their markets higher into the later part of the week.
With the onset of lower corn prices and the upbeat tone from being able to sell fat cattle higher last week, feedlot managers are eager to test this week’s market. As the board pushes a higher tone that’s moving most of the nearby contracts out of their sideways trading range, traders are relying on the fact that feedlots will likely price cattle higher again this week.
However, with slaughter speeds expected to wane through the third quarter, the question is: Will the fat cattle market be able to hold the market steady to somewhat higher? If so, the bulls of the market will likely take charge and push the complex even higher, but if not, the reality that we’re still working our way through the dog days of summer will set back in and cool the market’s current tone.
August live cattle are up 82 cents at $138.70, October live cattle are up 75 cents at $144.62 and December live cattle are up 60 cents at $150.57.
Last week’s negotiated cash cattle trade totaled 102,980 head. Of that, 68 percent (70,046 head) were committed for the nearby delivery, while the remaining 32 percent (32,934 head) were committed for the deferred delivery.
Last week, southern live deals had a range of $135-138.50, mostly $135-136, steady to $1 higher than the prior week’s weighted averages. Northern dressed business had a rather large range of $224-232, mostly $225-227, steady to $2 higher than the previous week’s weighted average basis in Nebraska.
Boxed beef prices are higher, with Choice up $1.79 ($266.41) and Select up $1.15 ($239.82) with a movement of 50 loads (25.29 loads of Choice, 9.65 loads of Select, 7.74 loads of trim and 6.95 loads of ground beef).
Feeder cattle
As the corn market traipses 3-4 cents lower in its nearby contracts, the feeder cattle market is running higher into Monday’s start to make the most of the corn market’s weakness. With the announcement that more vessels have left the ports of Ukraine and with the timely rains that came this past weekend, the corn market is feeling pressured from multiple different angles.
The onset of a weaker corn complex and a somewhat strengthened live cattle market could make all the difference for the feeder cattle market this week. The market sits well positioned to rally technically, as the market continues to support upside trade potential as the contracts look to finish the head and shoulders formation in the September contract.
Last week, Superior Livestock Auction hosted their Video Royale sale in Winnemucca, NV, and buyers showed no concerns about the market and bought both calves and feeders with immense aggression. August feeders are up $2.35 at $181.87, September feeders are up $2.75 at $186.12 and October feeders are up $2.20 at $188.15. — ShayLe Stewart, DTN livestock analyst
